Fixed financial charges include ________.
A) common stock dividends and bond interest expense
B) common stock dividends and preferred stock dividends
C) bond interest expense and preferred stock dividends
D) stock repurchase expense

Question

Quizplus · Accepted Answer

Fixed financial charges refer to predetermined expenses that a company has to pay regardless of its performance. Bond interest expense and preferred stock dividends are examples of fixed financial charges. Common stock dividends and stock repurchase expense are not fixed financial charges as they depend on the performance and decisions of the company.

Fixed Financial Charges Include ________